+1-415-315-9853

info@mywordsolution.com

## Statistics

Everhart, Inc., is a U.S. firm with no international business. It issues debt in the United States at an interest rate of 10 percent per year. The risk-free rate in the United States is 8 percent. The stock market return in the United States is expected to be 14 percent annually. Everhart's beta is 1.2. Its target capital structure is 30 percent debt and 70 percent equity. It is subject to a 25 percent corporate tax rate. Everhart plans a project in the Philippines in which it would receive net cash flows in Philippine pesos on an annual basis. The risk of the project would be similar to the risk of its other businesses. The existing risk-free rate in the Philippines is 21 percent and the stock market return there is expected to be 28 percent annually. Everhart plans to finance this project with either its existing equity or by borrowing Philippine pesos.

a. Estimate the cost to Everhart if it uses dollar-denominated equity. Show your work.

b. Assume that Everhart believes that the Philippine peso will appreciate substantially each year against the dollar. Do you think it should finance this project with its dollar-denominated debt or by borrowing Philippine pesos? Explain.

c. Assume that Everhart receives an offer from a Philippine investor who is willing to provide equity financing in Philippine pesos. Do you think this form of financing would be preferable to Everhart than financing with debt denominated in Philippine pesos? Explain.

Statistics and Probability, Statistics

• Category:- Statistics and Probability
• Reference No.:- M91767252

Have any Question?

## Related Questions in Statistics and Probability

### These are pretty similarthe population standard deviation

These are pretty similar: The population standard deviation of the number of people who shop online is 3.1. If you want to be 99% confident that the sample mean is within 2% of the population mean, how many people must b ...

### A recent report suggested that older people think more

A recent report suggested that older people think more slowly than younger people because they have more information stored in their brains. Because WeStudyEverything wasn't sure regarding the source of the study, they d ...

### John is an avid fisherman and wants to know if there is a

John is an avid fisherman and wants to know if there is a correlation between the amount of time he spends fishing and the amount of fish he catches. He decided to keep track of the time he spent at the lake and the amou ...

### Let f be a social welfare function satisfying the

Let F be a social welfare function satisfying the independence of irrelevant alternatives property, and let a, b be two distinct alternatives. Let P N and QN be two strict preference profiles satisfying a> Pi b ⇔ a>Q i b ...

Read: full English transcript of Osama bin Laden's speech What are some examples of bin Laden's complaints against Western society? What seems to be his plan for the Islamic world?

### Ship collisions are rare in the houston ship channel the

Ship Collisions are rare in the Houston Ship Channel. The mean is .8 collisions in 6 months What is the probability of no collisions in 6 months. What is the probability of one collision in a year?

### The historical context of england in 1215 with the costs of

The historical context of England in 1215 with the costs of King Richard the Lionheart's ransom and the crusades. What were the nobles' complaints? How did the nobles' interests differ from the king's interest? What inte ...

### 1 what advantage do experiments have over descriptive and

1. What advantage do experiments have over descriptive and correlational studies? 2. A well-designed experiment possesses what three characteristics? 3. Distinguish between qualitative and quantitative levels of an indep ...

### Two pollsters are conducting surveys to estimate the

Two pollsters are conducting surveys to estimate the proportion of Clarkston, Michigan citizens who support a bond issue to build a sports stadium. Both pollsters use the same methods; however, their sample sizes differ. ...

### Manifest destiny was a powerful force in nineteenth century

"Manifest Destiny was a powerful force in nineteenth century America not only calling for the expansion of the nation physically but also for spreading its ideals to more parts of the world. In what ways was slavery both ...

• 13,132 Experts

## Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

### WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

### Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

### Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

### Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

### Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro